Ex-Koerber attorneys: Feds erred in talks with alleged Ponzi schemer

Trial • At issue in fraud case is whether Utah County businessman was legally represented.

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Former attorneys for businessman Rick Koerber testified Wednesday that they would have advised him not to meet with federal agents investigating alleged wrongdoing at Koerber's Utah County real estate investment companies.

Koerber's current attorney, Marcus Mumford, is asking U.S. District Judge Clark Waddoups to prohibit the federal government from using as evidence anything from two interviews in February 2009. Interviewing Koerber without permission from an attorney violated his constitutional rights and ethical standards, Mumford asserted.

Prosecutors contend Koerber came in voluntarily after they contacted Salt Lake City defense attorney Max Wheeler, who they say told them he no longer represented Koerber because he had not paid his legal bills.

Koerber is facing 18 counts of fraud, money laundering and tax charges in an indictment that alleges he ran a Ponzi scheme in which about half of the $100 million the companies took in from investors went to pay back other investors to make his operation of FranklinSquires Cos. and related entities appear profitable.

Wheeler testified Wednesday that Koerber was behind on payments when Wheeler talked to a prosecutor and a state investigator sometime prior to the interviews.

"I told [the prosecutor] I would not be working on Mr. Koerber's file," said the attorney. But he added that whether an attorney is representing a client at any one time can be a "nebulous concept" and that he referred them to other attorneys who he believed did represent Koerber.

"I never thought Mr. Koerber was not represented," Wheeler said.

Russell Skousen, the former director of the Utah Department of Commerce who went to work as in-house legal counsel for a Koerber company in 2005, also testified Wednesday that he represented Koerber personally.

Skousen said he was Koerber's attorney through May 2009, although he did only occasional work for him after the companies fell on hard financial times in 2008.

"I wasn't on salary after a period of time, and I just consulted with Mr. Koerber from time to time," testified Skousen, who said he would have advised Koerber not to talk to the agents had he been consulted.

Judge Waddoups gave both parties time to make additional arguments before he makes a decision on the issue.

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